Interview with Angie Ngoc Tran

On 11 May 2014, a Chinese deepwater oil rig was erected in a contested area of the South China Sea, unleashing a wave of protests in Vietnam. In the following days, some reports claimed that workers in several industrial areas went on strike against their Chinese employers resulting in several factories being damaged and Chinese staff/administration killed or injured. Although the government in Hanoi reacted with hundreds of arrests, the consequences for the local economy may be dire. According to the Vietnamese press, sixty thousand workers have lost their jobs due to the shutdown of the damaged factories for an indefinite period. Of these newly unemployed people, forty thousand will get subsidies and the other twenty thousand a one-off compensation payment. These tragic events were brought to the attention of the global public – not only the geopolitical upheavals taking place in East and Southeast Asia, but also the continued existence (way too often overlooked, at least in comparison with the attention bestowed on China) of a dynamic Vietnamese working class that does not refrain from playing an active role in the country’s political life. To gain a better understanding of the dynamics of labour activism in Vietnam, we interviewed Angie Ngoc Tran, professor of Political Economy at California State University Monterey Bay, and author of Ties That Bind, a recent study on the Vietnamese labour movements.

Question: In the past month, you have been working in Vietnam, interviewing workers and other stakeholders in the field of labour relations. What new insights into the recent riots were you able to gain from your interviews?

Angie Ngoc Tran: My answer is based on information that I compiled and triangulated from interviews (with workers, journalists, union officials, human resource personnel, and other researchers), and visits to some affected factories and industrial zones in Vietnam. Please note that I do not intend to make generalization, but simply provide some broad observations and insights.

Before getting to the basic questions: “who lost and who benefited from these riots, and why,” let us look at some facts. The riots started off with teams of young adults on motorbikes entering these factories with flags in hands, asking the workers to join them for the demonstration. Evidence shows that some currently-employed workers did join the protests, carrying the flags and nationalist “Truong Sa/Hoang Sa islands” banners during the day. But when the protest (of the thousands) escalated into riots in the evening, the “underground leaders” (or “x├г hс╗Щi ─Сen” in Vietnamese) started the violence, smashed the factories, and started looting these damaged factories, according to many sources. Then some of the participating workers followed suit in a “herd-like” behavior of the masses, looting not necessarily their own factories, but other factories along their path. Most damaged factories (over 340 companies) are owned by Taiwan, Hong Kong/China, Korea, with some from Japan, Malaysia, Britain and even Vietnam. And proximity is very significant: the riots started in two industrial zones in Binh Duong province which then spread to industrial zones in the nearby Dong Nai province and in Ho Chi Minh City. These areas house thousands of migrant workers who work for the factories in these industrial zones.

Most of the arrested leaders came from outside of the damaged factories, they were not currently employed by those factories. Evidence shows that most of these “underground leaders” were former migrant workers from poor provinces in north of the central (Thanh Hoa, Nghe An, Ha Tinh) who were laid off for various reasons, a form of lumpenproletariat (in this context: chronic unemployed or unemployables, people who were cast out by factories in these industrial zones). They came to each industrial zone prepared with maps so they knew how to get to specific factories inside these zones. These leaders brought Vietnamese flags with metallic canes (intended to smash the factory facilities) and drove motorbikes for quick escape. They disbursed money to participants to entice them to join the “protests.” There were communications between these organized leaders, such as group 1 calling group 2, etc. Participating workers got a small payment (ranging from $5 to $10 each). These facts disputed Edmund Malesky’s assertion in an interview to The New York Times (June 30, 2014) that these riots were “disorganized and chaotic.”

Overall, current workers did not benefit from these riots. In the affected factories, they lost from one to six days of work, as well as potential overtime work to make extra money. While most affected factories paid workers full salaries for the days of work they lost, quite a few only paid workers 70-75 per cent. Moreover, quite a few factories deducted these days of riots from workers’ annual vacation time. These are real losses to the workers. As such, it was not in the long-term interest of those who held jobs to have engaged in these riots. In fact, when asked about this, some currently-employed workers said that they did not want the riots because destroying the factories meant endangering their own jobs.

The ownerships of these damaged factories are wide-ranging, beyond Chinese ownership: Taiwan, Hong Kong, Singapore, Korea, Japan, Britain, Malaysia, Thailand, as well as some Vietnamese-owned factories. On that fateful day, May 13, 2014, many factory owners/managers, informed in advance by the industrial zone management and unions, had promptly shut down the production lines and released workers from work as soon as the “leaders” arrived in motorbikes. This was the strategy to minimize the losses to their factories. The protesters returned later in the evening to destroy and burn some factories; in some cases, they even looted the factories’ property.

But management is not permanently hurt or damaged. Most damaged factories got paid promptly by the insurance companies, with the Vietnamese government assurance and even factory visits. The two damaged factories that I visited (one in the most affected industrial zone: The Vietnam-Singapore Industrial Zone in Binh Duong Province; and the other one in Binh Chieu Industrial Zone in Ho Chi Minh City) completely recovered from their damages to the point that I could not detect any damages caused by these riots. Moreover, from what I observed during my visits, except for some completely burned down factories in these industrial zones, most damaged factories have resumed their operations and workers have returned to work.

It is not in the interest of the Vietnamese state to instigate these riots. Not only the Vietnamese government suffered from a damaging image of instability (unfavorable to courting foreign investment), but the insurance companies and state budget (to pay for the factories that were uninsured) had to pay a dear price: hundreds of billions of VND to compensate these damaged companies. Note that these were initial payments, not yet the whole amounts. Whether they would do this to curb protests officially is unclear.

While it is true that some currently-employed Vietnamese workers were involved in the protests, we can rule out the claim that those workers led these riots: destroying the factories means endangering their own jobs. But we can assert that the “underground leaders” had nothing to lose to take revenge against foreign management who laid them off or cheated them over low pay and under-funded benefits. The lack of effective protest leadership from the one-and-only labor union (the Vietnamese General Confederation of Labor) can lend some support to the hypothesis that workers may have found these “underground leaders” to be more effective in carrying out their anger and frustration, either directly at their own factories or capitalists in general. However, at the end of the day, the destruction and looting (led by those “leaders”) did not benefit currently-employed workers, the proletariat, because that means the end of their jobs and did not address their long-term concerns: the lack of job security, livable wage, properly funded benefits and decent working conditions. As such, the role of the 21st century lumpenproletariat in the Vietnamese labor scene is very complex and deserves further study in the future.

But who benefited from these riots, and what sources funded these riots remain the topics of ongoing investigation. Of course, conspiracy theories abound without evidence: potential involvement of some Chinese sources to make Vietnam less attractive as a stable investment destination. And the role of a pro-democracy source outside of Vietnam has not yet been ruled out.

Q: Riot aside,since 2006, Vietnam has experienced a remarkable growth in the number of industrial actions, with several scholars talking about a “wave of strikes”. Unfortunately, studies that take into account what happened after 2011 are scarce. Could you please tell us how the situation has changed in the past few years? Is the number of the strikes still growing, or has the discontent of the workers somehow subsided?

A: First, let’s have an overview of the “waves of strikes.” In my 2013 book, Ties That Bind, I analysed labour mobilization and protests for more than one hundred years, but with a focus on labour activism since the Doi Moi era (renovation or market reform) that intensified since 1986. There are three strike waves, not just the 2006 strike wave that you mentioned. The 2006 strike wave was about the seven-year freeze of the minimum wage, and the strikes forced the state to legislate and Foreign-Direct Investment (FDI) factory owners to comply with a 40 per cent minimum-wage increase. Then there were the 2007 strikes, where workers demanded wage increases to compensate for spiraling inflation, leading to the state-mandated annual inflation adjustment starting in January 2008. Finally, the 2008 strikes against FDI factories that refused to implement the inflation-adjusted decision. While my book covers the strikes from 1995 to 2011, I have continued to follow what is going on throughout Vietnam’s factories. In looking at the statistics, it is important to keep in mind that the Vietnamese economy and politics are now entwined within the global capitalist system. The ascension to World Trade Organization (WTO) membership (January 2007), rising inflation followed by the global financial crisis of the latter part of the decade, and other world and regional issues also affect Vietnamese workers.

No, the discontent of the workers has not been satisfied, and labour actions have not subsided, even when the numbers of reported strikes seem to have decreased in the past several years (see my book for non-reported strikes). In the last three years, reported strikes show a steady decrease: 981 strikes in 2011, 539 in 2012, and 355 in 2013. Most of these strikes (about 70 per cent) took place in unionised factories; over 70 per cent took place in Korean- and Taiwanese-owned enterprises, and most of these factories assemble garment products and leather shoes for export.

But this does not mean that there were fewer strikes. Here is why: The progressive labour newspapers have been walking a fine line that divides what they are permitted to report from what they may not when circumscribed by the party-state. Before Vietnam was admitted to the WTO, the state felt compelled to show the world that it tolerated labour dissent and “independent” media coverage. These newspapers were able to criticise irresponsible state apparatuses that failed to respond to workers’ demands. In fact, they played a decisive role in reporting on a daily basis the 2006 minimum-wage-strike wave that brought all key stakeholders to the negotiating table and resulted in the 40 per cent minimum-wage increase. This important victory also has institutionalised annual inflation adjustments to various minimum wage levels in both FDI and domestic sectors. But the situation changed after Vietnam joined the WTO (plus, the state grew concerned for its power as strikes became widespread in 2008): since 2008, the state has constrained labour resistance efforts and labour newspapers’ reportage. Overall, although fewer strikes were explicitly reported in these labour newspapers, they continue to occur regularly.

Q:In your experience, what are the main reasons behind the strikes in Vietnam today? Is it true, as many have argued, that the Vietnamese labour movement is experiencing a transition from rights-based to interests-based mobilisations?

A: I disagree with this simplistic framework, and evidence from on-the-ground strikes does not support “a transition from rights-based to interests-based mobilisations”. First of all, from my research, I found that it is not possible to separate rights from interests! This bifurcation is artificial and unrealistic. It privileges the “rule of law” language that has been adopted since Vietnam integrated further into the neoliberal world since 2001, and it glosses over the much more complex Vietnamese historical and political–economic contexts. It does not reflect the voices of the workers in real life. They often use the Vietnamese words, quyền lс╗гi, which means “rights and benefits” – as one interconnected concept, not two – to identify the causes of strike. The central labour union, the Vietnamese General Confederation of Labour (VGCL), also acknowledges this inseparability. Starting in 2010, the VGCL has been acknowledging three strike categories: rights-based, interests-based, and a combination of the two. Even in developed countries, can we separate “social, health and unemployment insurances” from basic labour standards?

In the letter of the law, this distinction between rights (legal requirements as stipulated in the Labour Code) and interests (demands higher than legal requirements) tends to serve the powerful interests of the FDI community, not the interests of the workers. This separation, codified in two respective protocols in the strike clause (Chapter 14), allows strikes only when management failed to fulfill the agreed-upon interests. If the violations are about “rights”, then workers must settle with management in the labour courts, not through strikes. But in real life, most violations continue to be on basic labour standards stipulated in the Labour Code, and workers have neither time nor resources to bring management to court.

Here is an example of basic “rights violation” that continues to be one of the most often-cited reasons for “wildcat” strikes: Management failed to contribute to the social and health insurance funds for the workers. By law, management has to contribute 15 per cent of the total wages paid by their enterprise to social insurance and 2 per cent to health insurance, and workers were to contribute 6 per cent to social insurance (as per the Labour Code). But while workers’ salaries usually are dutifully deducted, unscrupulous management often appropriates these funds for its own interests and does not contribute to the general social insurance fund as required by law. Please read my 2013 book to understand more about management practices to avoid contributing properly to workers’ Social Security funds. One of those strategies is to not calculate worker contributions based on their total salaries – which would include overtime pay – but on their lower base salaries, resulting in underfunded benefits (social and health insurance) and no (unemployment) benefits at all for workers who lose their jobs when the factories close. Another example of the inseparability of rights and interests is the need for a livable wage. In addition to receiving adequate benefits such as Social Security, health and unemployment insurance, and annual sick leave, workers need to receive a livable wage (higher than the state-set minimum-wage levels) to survive. The 2014 minimum wage level for urban areas (the region with the highest level compared to suburban and rural areas) – about $128 USD per month – covers only about 75 per cent of basic necessities for workers.

Here is an unfolding crisis in the last three years that shows the interconnection of rights and interests: The future of the underfunded Social Security/insurance funds which face a foreseeable collapse/bankruptcy is the topic of discussion in the Vietnamese parliament as we speak! Debts are mounting: According to statistics from the Vietnamese Social Security Office, by the end of March 2014, the nationwide total Social Security debts were over $524 million USD – an 18 per cent increase compared to 2013 – of which 381 million USD were social insurance debt and over $143 million USD health care debt. Workers suffer the most in this situation. Hundreds of thousands of poor workers had their salaries reduced by paying the tax, but management either appropriated these funds for its own business interests or simply avoided contributing altogether. Workers are stranded when the owners/managers flee the country (or move to another region in Vietnam), leaving behind only rental property, which can’t be salvaged to pay back arrears or social and health debts for workers.

Migrant workers suffer more than local workers because they do not stay in one place; once they lose their jobs (due to fluctuation of the world economy, bankrupt owners fleeing their factories, etc.) as well as social and health insurance, they cannot afford to stay in the city but have to migrate to another province/region to start again. As of now, out of 300,000 enterprises nationwide, only 150,000 factories have joined and contributed to the Social Security funds (based on statistics by Ministry of Labour, Invalids, Social Affairs, or MOLISA). On the other hand, state financial discipline of the violators has been so low and monitoring has been ineffective (state officials are spread too thin) in punishing management for non-compliance or to set an example to others who may be doing the same illegal activities. Again, workers suffered the most, on these basic rights violations. That is why they have been going on strike. Many progressive local-level labour unions have been helping them to bring these cases to court. But, as I argued in my book, even with an established legal system in place, the Vietnamese courts have done little to expose and penalise owners who cheated their workers and deceived the state.

Q:Although China and Vietnam are remarkably similar regarding concerns in the political system and the organisation of labour, Anita Chan has argued that Vietnamese workers have a higher level of “consciousness”. In your opinion, which factors play the most important role in shaping the rights consciousness of the Vietnamese worker?

A: Again, I would not characterise it as “rights” consciousness of the Vietnamese workers because it is rather limited, privileging the legal framework of the market system, and not contextualized in the history of the Vietnamese labor movement. It is not just “rights versus interests” language that shapes worker consciousness. As I argued in my book, it is the convergence of these ties: the historical socialist legacy – including the entitlements that workers expected under the socialist regime, such as social, health and unemployment insurance – as well as cultural factors (gender, native place, ethnicity and religion) that bring workers together in good times and bad times, enabling the development of class consciousness at moments of crisis, to strike for their rights.

Moreover, historical legacy matters. I found evidence that in the equitisation/privatisation process (the transformation of state-owned enterprises to varying levels of private ownership started in 2002), state workers expected that the state live up to its socialist vision under which they were raised. They expected state protection from (capitalist) predators that prey on them. They petitioned the government, appealed to the labour press and labour courts, asking them to defend the very socialist values the state espoused and to get their severance pay and compensation. Young non-state workers, who have little or no direct experience of living in a socialist regime, also invoked socialist ideology (equity, justice, no exploitation) in their various forms of struggle. Of course, things may change in the future as younger workers raised under the market system with its logic and FDI growth are more removed from such justice consciousness.

Overall, it is the sense of entitlements, not necessarily rights, that workers reminded the state of by sending petitions and complaints to the labour newspapers and to relevant state agencies, as well as fighting modern-day capitalists to restore non-wage allowances and benefits distributed in the bygone socialist era. Monitoring strikes in the last several years, up to 2014, I found that most workers expressed concerns about basic violations of rights, and these rights are closely connected to the so-called “interests”.

Q:As China, Vietnam also has a perpetually evolving labour legislation. In 2012 alone, the Vietnamese authorities introduced an amendment to the Labour Law and a new Trade Unions Law. Does the Vietnamese labour law have an actual impact on the life of the workers, or does it remain a dead letter?

A: The Vietnamese Labour Code is very progressive, especially with special stipulations for female workers. But in large part, it is not properly implemented in the context of the global supply chain with its uneven power relations. One example is the social insurance crisis mentioned previously. Here is how the global supply chain works: Most Vietnamese workers are in the bottom (Tier 3) assembling clothes and shoes for FDI contract factories/suppliers (Tier 2) – most are from Korea and Taiwan who invest in textile/garment/footwear factories – who take orders from the brand-name corporations/MNCs (Tier 1). The MNCs are very savvy about basing the low subcontracting price on the government-set–minimum wage (often not livable), so these corporations tend not to approve “non-wage allowances” requested by Tier 2 suppliers to appease workers. Sometimes, Tier 2 uses that as an excuse not to respond to workers’ requests, even when those increases account for a very small percentage of the subcontracting price paid to the suppliers.

The 2012 Trade Unions Law has offered a way to empower the workers. Here is an interesting recent union development: Up to now, most strikes took place in factories that are unionised, but ironically they are considered “wildcat” because they are not led by the VGCL. Instead, they were led by workers, most of whom stay underground to prevent being caught by the state and management. Acknowledging the VGCL’s own weakness and the power of worker-led strikes, they have been using the 2012 Trade Unions Law (Stipulation No. 5), which permits workers to initiate and form the enterprise-level union by themselves (still under the general auspice of the VGCL) instead of waiting for the district or provincial level union officials to approach management to organise at that factory. The VGCL officials hope that this will bring out grassroots leaders from among the workers themselves. Emerging from the same condition of their fellow workers and respected by them, these leaders should be able to lead the strikes when needed. This worker empowerment at the grassroots level is a welcome trend to assist with the collective bargaining process. It would be interesting to monitor the outcomes of this initiative to facilitate and empower labour organising.

The unions have been empowered by a very powerful forum: the labour press. In my September 2007 article, “The Third Sleeve,” I elaborate on the important role of the labour newspapers, which I found to have given greater voice to workers than is apparent in the traditional structure of communist systems. I’d like to highlight the two most important daily labour newspapers that cover labour–management relations issues, especially strikes: the Ng╞░с╗Эi Lao ─Рс╗Щng (Labourer, the official forum of Ho Chi Minh City Labour Federation), and the Lao ─Рс╗Щng (Labour, the media arm of the central union, the VGCL, based in Hanoi with a bureau in the South). I found evidence that while still very much ensconced within the state and labour-union structure, they have been using their connections and knowledge inside the system to expose conflicts within the state structure and to mediate among competing state interests with respect to labour organising vis-├а-vis foreign capital. The journalists have tried to maintain a balance between serving the workers and responding to the political agendas of the party, the state, and the labour unions.

Q: In China, the entrepreneurial community has always had a strong influence over the legislative activity that led to the adoption of new labour laws and policies. For example, in 2006, the Chinese authorities radically amended the contents of a relatively pro-labour draft Labour Contract Law. They did this to avoid the “flight of capital” threatened by the foreign business community. How powerful is the foreign business community in Vietnam? Does it have the same influence over the formulation of labour policies?

A: Substantial lobbying efforts on behalf of management interests of both Vietnamese business associations and of global capitalists (including the powerful American Chamber of Commerce and the chambers of commerce of the top investors in Vietnam, such as Korea, Taiwan and Japan) have influenced labour legislation, especially the strike clause in the Labour Code and the Chapter 14, Resolution of Labour Disputes. In my December 2007 article, “Alternatives to the ‘Race to the Bottom’ in Vietnam,” I pointed out the two opposing perspectives that existed at the time and later emerged in the 2011 debate, leading up to the 2012 ratification of the Labour Code revision (including Chapter 14): 1) the pro-worker perspectives of the outspoken Vietnamese delegates in strike-prone provinces, who argued for the inseparability of rights and interests; and 2) the perspectives of people who compromised with the FDI community by allowing workers to strike only when the violations relate to interests, not to rights. The 2012 revision further weakens the workers’ role in the whole process of strike resolution.

Q:In your opinion, what can the international labour movement do to boost labour rights in Vietnam?

A: I have two suggestions: First, the international labour movement can boost labour rights in Vietnam by helping to empower an existing structure – the labour legal assistance centres – established jointly by some local labour unions and international NGOs, such as Oxfam. In recent years, these centres have provided free-of-charge legal assistance to poor migrant workers to empower them in labour–management negotiations. The centres are strategically located in strike-prone areas in the South (Ho Chi Minh City, Dong Nai, Binh Duong). But more centres are needed in the North and Central areas, where there have been strikes too. This model can empower the workers directly and facilitate global labour solidarity by sharing best practices, negotiating skills and by connecting Vietnamese workers with workers in other countries, in both online and face-to-face visits.

Second, given the VGCL’s initiative to empower grassroots workers to form enterprise-level unions, the international labour movement can send experienced unionists to Vietnam to share information and experiences, and to train Vietnamese union officials in bargaining skills, especially in collective bargaining agreements. The VGCL officials have openly expressed the need to improve their technical bargaining skills. I do think that they need to understand how the global supply chain works, and the relationships between Tier 1 and Tier 2 capitalists in order to effectively negotiate with them for livable salaries – not minimum wage – and other benefits (social, health, unemployment insurance) for workers. Moreover, global unionists/labour NGOs can enlighten the VGCL about the popular role of Corporate Social Responsibility (CSR) initiative in the global economy, how to demand MNCs (Tier 1 and Tier 2) to genuinely implement CSR’s codes of conduct (or labour standards) – not paying lip service to appease final consumers – and how to directly appeal to final consumers/end users in developed countries, to improve both working and living conditions of Vietnamese workers.

References

Tran, Angie Ngoc. Ties That Bind: Cultural Identity, Class and Law in Flexible Labour Resistance in Vietnam, Southeast Asia Program (SEAP), Cornell University Press, November 2013;

2 Responses

> “In the following days, some reports claimed that workers in several industrial areas went on strike against their Chinese employers resulting in several factories being damaged and Chinese staff/administration killed or injured.”

1) Not ‘some reports’ – this was front-page news around the world for several days.
2) The affected factories were mostly Korean/Taiwanese companies.
3) It is most likely that outsiders, not workers, were behind the main unrest.
4) The deaths of four Chinese nationals were confirmed. These were all Chinese workers building a steel factory for a Taiwanese company in the central province of Nghe An. It is likely that these deaths occurred during a confrontation between hundreds of Chinese workers and locals and it is likely there were fatalities among the Vietnamese which have not been officially reported.

[…] veteran mainland Chinese management along in the chase for low wages. This is illustrated by the 2014 anti-China factory riots, in which Taiwanese factories were reportedly looted and burned in anger over a Chinese oil rig […]